Iran burns more gasoline despite price hike

Iran’s gasoline consumption rose in the first quarter of this year which began on March 21 despite the country’s cancellation of subsidized fuel to motorists, the Ministry of Petroleum said on Monday.

Iranians burnt 6.65 billion liters of gasoline in the period, a rise of three percent versus the similar period a year ago, figures published by the National Iranian Oil Products Distribution Company (NIOPDC) showed.

In May, the government stopped allotting 60 liters of subsidized gasoline a month to every Iranian who drove a homemade car after raising the gas price earlier.

Fuel prices in Iran are still among the cheapest in the world, which have resulted in a habit of prodigal consumption by many citizens. More than 15 million vehicles ply the country’s roads which guzzle enormous amounts of fuel. 

According to Minister of Petroleum Bijan Zangeneh, Iranians burn nearly 70 million liters of gasoline a day, of which five million liters is imported.

The country halted producing petrochemical gasoline after President Hassan Rouhani came to office due to pollution issues. Gasoline production at petrochemical units began during former President Mahmoud Ahmadinejad’s tenure when the West stopped sales to Iran as part of its sanctions.

According to the local media, the government has to increase gasoline imports especially after ditching plans to build 13 new oil refineries due to technical and financial issues.

Iran has also suspended construction of oil refineries in Malaysia and Syria for unknown reasons, the Mehr news agency quoted NIOPDC head Abbas Kazemi as saying.

Zangeneh, however, has said Iran would need no more gasoline imports next year when a major refinery being built in the Persian Gulf became operational.

According to the minister, Iran will even turn to an exporter of gasoline and diesel once the Persian Gulf Star Refinery comes on stream.

“With the completion of the Persian Gulf Star Refinery, 36 million liters (a day) will be added to the country’s gasoline and diesel production,” he said in February.

Iran is building the Persian Gulf Star Refinery in Assalouyeh at an estimated cost of 2.5 billion euros. The plant is further expected to produce 360,000 barrels per day of gas condensates on top of jet fuel and other products.

A major European seller of gasoline to Iran before the sanctions sent its executives to Tehran last week in search of new business opportunities.

Glencore confirmed that its head of oil Alex Beard had traveled to Tehran with a small team to meet with officials at Iran’s Ministry of Petroleum and the Iranian National Oil Company.   

Along with Dutch-owned energy companies Trafigura and Vitol, the Anglo-Swiss commodity trader supplied 35% of the gasoline which Iran imported before the sanctions stopped the sales in 2011.

According to Mehr, Iran’s Oil Ministry officials have also held several rounds of talks with Vitol executives.

HB/HB

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